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Elon Musk’s SpaceX is set to debut on stock market this week. It could become the biggest stock market debut in history, with the company expected to raise nearly $75 billion at a valuation of about $1.77 trillion, as per various analysts.Elon Musk is expected to reserve an unusually large share of the offering for individual investors, potentially more than 20 per cent of the shares on sale, compared with the 5-7 per cent typically allocated in an IPO. Brokerages are bracing for demand that could far exceed supply as retail investors seek a chance to buy into a company that has remained largely inaccessible during its two decades as a private enterprise, as analysed by The Wall Street Journal.For many of these investors, the appeal goes beyond SpaceX’s business fundamentals. It is also a bet on Musk, whose supporters helped transform Tesla into one of the world’s most valuable companies and whose ventures continue to attract a loyal following.

Should you invest? What investors and analysts are saying

As anticipation builds ahead of the listing, investors and analysts remain divided on whether SpaceX is worth buying at its expected valuation. The WSJ quoted retail investors, financial advisers and market analysts offered sharply differing views on the IPO, highlighting both the excitement surrounding Elon Musk’s rocket company and concerns over its lofty valuation.Some ‘cannot wait’ to buy shares while others are more cautious and being downright dismissive saying, ‘avoid it like the plague’.Deen Noory, a 41-year-old fintech entrepreneur who has spent years listening to Musk’s interviews and says Tesla stock accounts for about 85 per cent of his net worth. When SpaceX begins trading, he plans to buy. “What’s there to think about?” Noory said.He described himself as a believer in the entrepreneur’s vision of a future driven by artificial intelligence and space exploration. “You have a limitless industry with Elon Musk at the helm,” he said.The company is expected to reserve more than 20 per cent of IPO shares for retail investors, far above the typical allocation. Even that may not be enough. Brokerages expect overwhelming demand from investors who have watched SpaceX’s rise from the sidelines while private shareholders captured most of its gains.Wall Street is already preparing for the frenzy. A Merrill Lynch office in Houston recently held an information session for clients, complete with SpaceX-branded baseball caps. Robinhood, meanwhile, expects enormous demand through its IPO Access programme. CEO Vlad Tenev said that in the past, the brokerage had to persuade companies to allocate shares to retail investors.“We really had to claw and scratch and ask for favors,” Tenev said. “Pretty much every major IPO of consequence has been on Robinhood’s platform.”However, not everyone is convinced the excitement is justified. “I think most retail investors should avoid trading this like the plague,” said Dave Nadig, a veteran fund analyst who expects extreme volatility once shares begin trading. “This is one of the biggest get-the-popcorn moments I’ve had,” he added.

Historical data shows that roughly a quarter of IPO stocks lose at least half their value within three years of listing.Tamar June, a technology executive who remembers buying Yahoo stock on its first day of trading in 1996, is among those still hoping to secure SpaceX shares. “I get it—the guy is a bit strange,” June said. “But think of the ideas he has executed.”Others say the enthusiasm is unlike anything seen in recent years. “It’s just the perfect storm for exorbitant retail enthusiasm and demand,” said Mike Treacy, head market analyst and vice president of risk at Apex Fintech Solutions, adding “Strap on your seat belts.”Jeff Judge, a financial planner in Maryland, believes much of the demand has less to do with financial metrics than with Musk’s celebrity. “Most of the interest is emotional, which is the honest truth,” Judge said.That loyalty has helped Tesla build a shareholder base dominated by retail investors, and some prospective buyers see the same potential in SpaceX.Even some Musk believers are approaching the IPO cautiously. Josh Hill, a North Carolina-based sales manager, said he expects SpaceX to dominate the space industry over the long term. “Long-term, it’s a no-brainer,” Hill said. But asked whether he would buy shares on the first day of trading, his answer was more measured. “The price would have to fall,” Hill said. “Otherwise, I’m probably not a buyer.”Amid the mix of reactions, another thing to note is that the financial picture is far less straightforward. SpaceX was unprofitable last year, with reported loss of $4.9 billion, and its valuation has surged more than 2,000 per cent in recent years. At the IPO price, the company is valued at roughly 93.6 times annual sales, compared with about 3.3 times sales for the S&P 500. Critics argue that many of the biggest gains have already accrued to private investors and that retail traders could be buying at peak optimism.(Disclaimer: Recommendations and views on the stock market and other asset classes given by experts are their own. These opinions do not represent the views of The Times of India)